Higher expenses and lower revenues ate away at Norfolk Southern’s net profits in the second quarter of 2023.
The eastern U.S. Class I railroad reported net income of $356 million, or $1.56 per diluted share, for the second quarter of 2023, compared with net income of $819 million, or $3.45 per diluted share, for the second quarter of 2022.
Revenues were down 8% year over year (y/y) to $2.98 billion for the second quarter, with revenue from NS’ intermodal segment falling 23% to $745 million. A 1% increase in international intermodal volume wasn’t enough to offset a 14% decrease in domestic intermodal volumes.
Meanwhile, operating expenses were $2.4 billion for the second quarter, compared with $1.98 billion y/y. Expenses include a $416 million charge associated with the railroad’s ongoing response to the Feb. 3 NS train derailment in East Palestine, Ohio. NS noted that this charge does not reflect any potentially recoverable amounts under NS’ insurance policies or from any other third parties.
Adjusting for the eastern Ohio incident charge, NS’ (NYSE: NSC) adjusted income from railway operations would be $992 million, while adjusted diluted earnings per share would be $2.95. This constitutes declines of 22% and 14%, respectively, from the second quarter of 2022, NS said Thursday.
“During the quarter, we delivered on our commitments to improve service, invest in safety and resiliency, and enhance the quality of life for our craft railroaders. Each of these are foundational to our strategy and position Norfolk Southern well for the future,” NS President and CEO Alan Shaw said in a release. “We are committed to our long-term strategy and are positioning our franchise to take on volume growth and deliver for our customers.”
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